DarioHealth Reports First Quarter 2017 Results

CAESAREA, Israel, May 15, 2017 /PRNewswire/ -- DarioHealth Corp. (NASDAQ: DRIO), a leading global digital health company with mobile health and big data solutions, today reported financial and operational results for the three month period ended March 31, 2017.

First Quarter Highlights

• Record revenues of $1,007,000, increased 77% compared to the first quarter of 2016
• Sequential quarterly revenue growth of 20% over fourth quarter of 2016
• 76% of quarterly revenues derived from test strips and other consumables
• Gross profit of 10.5% as consumable strips made up greater percentage of revenue
• 6,900 Dario™ Blood Glucose Monitoring System devices sold in the U.S.; reaching cumulative sales of more than 25,000 devices in the U.S.
• Consumable strips growth of 20% over fourth quarter of 2016  

Chairman and CEO of DarioHealth, Erez Raphael, commented, "We are encouraged by the fact in less than one year from launch in the U.S. we have reached 25,000 devices sold in the U.S. and surpassed $1 million of quarterly revenue with the progress of the razor blade model and its higher gross margins.

"We are optimistic for the remainder of 2017 to bring an expansion of our platform availability in the United States to include Android, as well as wider insurance coverage. In addition, we are excited about several strategic partnerships, like Dominique Wilkins as a brand ambassador and others that are still in the works. We believe these alliances will lead to accelerated user growth and we expect to see revenue growth to continue in each sequential quarter, and wider market access leading to faster market penetration."

First Quarter 2017 Results Summary

Revenue for the first quarter ended March 31, 2017 was $1,007,000, a 77% increase from $568,000 in the first quarter ended March 31, 2016, and a 20% increase sequentially from the fourth quarter of 2016. The increase in revenues is mainly a result of continued market penetration into the United States and Australia.

Revenues for the first quarter of 2017 included direct-to-consumer sales in the U.S., as well as direct-to-consumer and business partners' sales in Australia, and product sales to distributors in the U.S., Italy, Canada and the United Kingdom.

Gross profit of $106,000 was recorded in the first quarter ended March 31, 2017, an increase of $208,000 compared to a gross loss of $102,000 in the first quarter of 2016. This represented a gross profit of 10.5% as consumable strips made up greater percentage of the revenues.

Operating loss for the first quarter ended March 31, 2017 increased by $2.3 million to $4.2 million, compared to a $1.9 million operating loss in the first quarter ended March 31, 2016. This increase is mainly due to the increase in our direct sales and marketing expenses in the U.S. and Australia as well expenses related to stock based compensation to management.

Financial income of $7.4 million was recorded in the first quarter ended March 31, 2017, compared to a financial expense of $445,000 in the first quarter ended March 31, 2016. This change was mainly due to reversing the warrant revaluation expense recorded in the fourth quarter of 2016, due to a price protection feature included in warrants issued to investors in March and August 2016. This price protection feature expired on March 8, 2017, and as a result we cancelled the liability related to these warrants by recording financing income of $7.4 million.

Net profit attributable to holders of common stock increased by $5.6 million to $3.2 million in the first quarter of 2017, compared to a loss of $2.4 million in the first quarter of 2016. This was mainly attributable to the increase in financial income previously described.

As of March 31, 2017, cash and cash equivalents totaled $2.8 million.  Subsequent to the end of the first quarter, on April 5, 2017, the Company closed a public offering of 1,450,000 shares, at a purchase price of $3.10 per share, for aggregate consideration of $3,840,000, net of issuance costs.

DarioHealth will host a first quarter 2017 conference call today at 9:00am ET.

Conference Call Details:

Date: Monday, May 15, 2017

Time: 9:00AM ET

Dial-in Number: (866) 682-6100

International Dial-in Number: (862) 255-5401

Webcast: http://www.investorcalendar.com/IC/CEPage.asp?ID=175941

Participants are recommended to dial-in approximately 10 minutes prior to the start of the event. A replay of the call will be available approximately two hours after completion through May 29, 2017. To listen to the replay, dial (877) 481-4010 (domestic) or (919) 882-2331 (international) and use replay ID 10384. The webcast replay will be available through August 15, 2017.

About DarioHealth Corp.

DarioHealth Corp. (NASDAQ: DRIO) is a leading global digital health company serving tens of thousands of users with dynamic mobile health solutions. We believe people deserve the best tools to manage their treatment, and harnessing big data, we have developed a unique way for our users to analyze and personalize their diabetes management. With our smart diabetes solution, users have direct access to track and monitor all facets of diabetes, without having the disease slow them down. The acclaimed Dario™ Blood Glucose Monitoring System all-in-one blood glucose meter and native smartphone app gives users an unrivaled method for self-diabetes management. DarioHealth is headquartered in Caesarea, Israel with a regional office in Burlington, Massachusetts. For more information, visit http://mydario.investorroom.com/.

Cautionary Note Regarding Forward-Looking Statements

This news release and the statements of representatives and partners of DarioHealth Corp. (the "Company") related thereto contain or may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as "plan," "project," "potential," "seek," "may," "will," "expect," "believe," "anticipate," "intend," "could," "estimate," or "continue" are intended to identify forward-looking statements. For example, the Company is using forward-looking statements in this press release when it describes expected alliances, states that it believes alliances will lead to user growth, states that it expects to see revenue growth continue, and when it makes statements about expectations of platform availability to include Android devices and wider insurance coverage which it believes will lead to faster market penetration.  Readers are cautioned that certain important factors may affect the Company's actual results and could cause such results to differ materially from any forward-looking statements that may be made in this news release. Factors that may affect the Company's results include, but are not limited to, regulatory approvals, product demand, market acceptance, impact of competitive products and prices, product development, commercialization or technological difficulties, the success or failure of negotiations and trade, legal, social and economic risks, and the risks associated with the adequacy of existing cash resources. Additional factors that could cause or contribute to differences between the Company's actual results and forward-looking statements include, but are not limited to, those risks discussed in the Company's filings with the U.S. Securities and Exchange Commission. Readers are cautioned that actual results (including, without limitation, the timing for and results of the Company's commercial and regulatory plans for Dario™ as described herein) may differ significantly from those set forth in the forward-looking statements. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. 

Public Relations
Shmuel Herschberg
DarioHealth Corp.
+1-800-896-9062
shmuel@mydario.com

Investor Relations
Rob Fink/Brett Mass
Hayden IR
+1-646-415-8972/646-536-7331
DRIO@HaydenIR.com

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SOURCE DarioHealth Corp.